Hello, I have traded futures before. I actually started trading futures before stocks. I have had some success with futures but found that I wasn't consistently profitable, i.e. I will make money then lose it, etc. I have read new Al Brooks' books and want to start trading again using price action methods. Only this time I am considering starting with stocks. I would prefer swinging a stock, i.e. buying it and holding it for a couple of hours to make a swing profit, equivalent to 4-6 points in ES. I need your help. Please suggest stocks that have nice long moves (am I asking for too much? )and good volume. Also, I would prefer more expensive stocks (low commission if I trade with IB). On my shortlist are AAPL, GOOG, SBUX, ATVI, WMT. I would also consider trading ETFs but haven't had much exposure to them except for GLD, which I like but it's too wild for me now. Thanks!
If you want to make money in "a couple of hours" I think you're better off sticking with Futures. The % move over that much time is much too low in stocks. On a super active 6.5 hour day a stock will only move 2-3%, and on most days they move less than 1%. You need to buy a lot of shares (at $600 each for AAPL) to make any money off that. "Swing" Trades in Stocks are normally over a period of 3-15 trading days. If you want higher % gains over that kind of time period, and at a much lower cost, look into Swing Trading with Stock Options. For example: I recently bought a June Call Option Contract for 100 shares of MCD, when the share price was 98.24. The shares would have cost me $9,824, whereas the Option cost me $157. If MCD goes up from 98.24 I will make roughly 38 cents for each $1 MCD goes up. If MCD goes down or sideways my Option's value will gradually fade away to $0.00 on June 15th. Also, the most I can possibly lose is $157, so there's built in Loss Control. This eliminates the need for Sell Stops and all the Whipsaws they cause, etc.
Personally I choose stocks that are not high priced. There are many stocks in the S&P500 currently with price not too low or too high, with adequate average volume and sufficient daily range in the recent past: AFL AGN AMGN AMP ANF APA APC ATI AXP BBBY BHI BTU C CAM CB CELG CERN CHRW CL CLF CNX COF COG COH COST CTSH CTXS DE DO DVN EQT ESRX EW FCX FDX FLR FTI HAL HES HOG HOT HP JOY JPM JWN KLAC MCK MON MOS MPC MUR NBL NE NEM NOV NSC NTAP NVLS OXY PCAR PH PM PNC PRU RDC RHT ROK RRC SHLD SLB SNDK STT SWK TDC TIF TROW TWC UTX VNO WDC WFM WHR WLP XOM YUM
Thank you. All excellent advice! I haven't looked into options yet, for some reason they seem too complicated for me. Maybe I am wrong, so will definitely research that.
anituchka, you are going to continue to lose money whether you are trading stocks or futures simply bcuz you have not developed and optimized a working strategy. If I were you I would start looking at currency futures, the eurousd contract( 6e) and gbpusd( 6b) make some beautiful moves on 15 min and hourly timeframes on support and resistance levels(especially daily pivots). If you can't make consistent returns in that market you might as well take your money to a casino.
Select a stock that is in the news and has the potential to be in the news in the coming days and weeks. Something which trades with an average volume in the millions. Something which you can understand and see everyday of the week.
Since you've been trading futures, why not stick with index ETF, and more specifically, the leveraged (and inverse leveraged) SSO, SDS, TZA, etc? They have high volume, give you leverage, and most importantly, you can start small and develop your strategy and scale up without a problem. Also, they are all optionable and because they are an index, the strikes are $1 apart which gives you maximum flexibility.
+1 If you don't have a well-defined strategy in place, then switching to a different instrument isn't likely to improve your profits. Flying by the seat of your pants may work after you've spent 10 years in the game, but not at this stage in your career.